- HEADLINES: Chicago corn sinks to new low at $4.11 March; Brazilian soy crop estimates edge lower; GFS midday weather forecast like overnight run.
- Chicago grain markets are lower at midday with speculative selling felt early in the reopening in corn, soyoil and soybeans. Speculators appear to be less willing to pressure wheat until more is known about new US economic sanctions that will be placed on Russia on Friday by the Biden Administration.
- March soybeans are back testing last week’s low at $11.62/bu while March corn futures have scored a new low at $4.13. The corn market is sagging lower as price has yet to reflect a sizeable increase in US corn export demand beyond Mexico. Chinese corn import margins are rising, but there has been no indication of Chinese demand for US corn following record imports from Brazil and Ukraine. Ukraine is pricing wheat/corn cheaply to gather cash to seed 2024 crops with fob corn offered at $4.25/bu and wheat at $5.70/bu. Ukraine wheat has an export chance to Indonesia depending on freight costs through the Red Sea or around the Horn of Africa. Brazil is not offering corn for export until late July at $0.60 over, which is nearly flat with the US Gulf corn price offer. US SRW Gulf new crop wheat is offered at $230/mt or $6.20/bu.
- Chicago brokers report that managed money has sold 1,900 contracts of wheat, 2,400 contracts of corn, and 1,500 contracts of soybeans. In the products, fund sales have been 2,100 contracts of soyoil and 2,500 contracts of soymeal.
- Brazilian 2024 soybean and corn crop estimates keep sliding. One key Brazilian forecaster trimmed their soybean crop estimate to 152.2 million mt vs a prior forecast of 153.8 million due to lower than expected yields across Northern Brazil. Long-time crop analyst, Dr Cordonnier reduced his Brazilian soy crop estimate to 145.0 million mt, which is down another 2.0 million in the past week due to later planted soybean yields being disappointing. He left his Brazilian corn crop estimate unchanged at 112.0 million mt. Others have the Brazilian soybean crop at 145.4 million mt whilst awaiting further yield surveys late February. Deral in Parana estimates that their soybean harvest has reached 42% completed, nearly double the rate of last year. The 2024 Brazilian soybean harvest is pushing ahead at a near record pace.
- Ukraine corn exports will jump in February on aggressive sales due to the need for producer cash flow to seed the 2024 spring crop. Ukraine will export over 4 million mt of corn in February, well above last year’s 3.3 million. Ukraine pricing of corn has been to move stocks. We calculate that USDA’s forecast for Ukraine to export 23.0 million mt of corn in 2023/24 is likely too low by 1-2 million mt. Ukraine farmers have an estimated 1.4 million mt of corn in the field from last year. As the war continues for a third year, the financial condition of the Ukraine farmer is worsening amid negative margins and a lack of capital.
- The midday GFS weather forecast is like the overnight run with below normal rainfall for Argentina and South-Central Brazil and near to below normal rainfall for Northern Brazil. Heat will be returning in the 8–12-day period with highs ranging from the mid 80’s to the mid 90’s. Brazilian high temperatures hold in the 80’s to the lower 90’s. The Brazilian soybean harvest will continue to score strong progress, while drying Argentine soils only become a problem with the return of a high-pressure ridge aloft and extreme heat. It is March when focus on the longevity of the Brazilian monsoon will be important as Amazon soils are exceptionally dry.
- March corn futures have pushed to fresh contract low at $4.11/bu on renewed speculative selling. The Brazilian soybean harvest is ongoing and paper premiums have eased by 5-9 cents on the extra supply. China booked 2-3 cargoes on the morning break, but they are not showing any urgency in the Brazilian soybean market. US weekly export sales will be pushed backwards due to Monday’s holiday. March-May Chicago wheat has pushed out to a 4-cent premium as exporters push for supply to fill Chinese orders. The bear market is reaching a mature stage, but it will take time before a Chicago rally can be sustained.